hard · Debt Capital Markets
A 10-year EUR-denominated bond is issued at par by a US multinational.
If the EUR/USD basis is 'negative' (e.g., -25 bps), how does this affect the issuer's all-in USD funding cost after swapping?
- It has no effect on the all-in cost.
- It increases the all-in USD cost.
- It only affects the principal exchange at maturity.
- It lowers the all-in USD cost.
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